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Posted: December 19, 2007

Murray: Emerging challenges in consumer policy

(Nanowerk News) Changing demographics will have a wide-ranging impact on income, pensions and healthcare in years to come, former BEUC director Jim Murray told EurActiv in an exclusive interview. Reflecting upon almost twenty years as head of the European consumers' organisation, Murray highlighted digital rights, nanotechnology and GM technology as the predominant issues to emerge during his tenure.

Jim Murray is an ex-director of BEUC, the European Consumers' Organisation.

You took up the role of director at BEUC in 1990 and are now leaving after 18 years. How has EU consumer policy evolved since then? Were digital rights the only 'new' consumer issue to emerge during that time or were there other major ones?

There were other new issues, including GM technology and more recently, nanotechnology. Digital rights are indeed new but the term is not really adequate to encompass all the recent changes related to information technology.

In 1990, fax was the fastest form of transferring documents or data, and the internet was largely the preserve of scientists. There were no mobile phones in ordinary use.

With the internet and e-mail, we have to face many challenges, including electronic commerce, IP rights, governance, globalisation and disintermediation (buying directly online instead of through a retailer, travel agent or other intermediary).

Enlargement would have been impossible or at least very much slower without the internet and e-mail.

As for digital rights, these are no longer a matter of audiovisual entertainment. More and more, we are receiving our information, news, culture and education, as well as our entertainment, in digital form.

Gas and electricity prices have tended to shoot up in recent years. Is the EU liberalisation process to blame or do you consider rising prices as necessary in order to make consumers change behaviour and contribute to the effort against global warming by saving energy? How can the right balance be struck between those two imperatives: consumer protection and consumer awareness?

I doubt very much if liberalisation is a significant factor in recent price rises. The main factor seems to be the price of oil, which is itself influenced by economic and non-economic factors, including political ones.

I assume that price rises will affect the behaviour of consumers and industrial users but the recent price rises are not generally driven by fiscal policy or domestic policy in the consuming countries – although there are, for example, some fiscal incentives for non-carbon technologies.

Having said that, I should add that liberalisation can sometimes bring price increases for domestic consumers. In some cases for example, the price of local or national telephone calls went up as part of a "rebalancing" process whereby, in the more valid cases, prices were brought more into line with costs.

There is also the danger that suppliers may overcharge domestic consumers who are relatively captive, in order to lower their prices for the biggest users who can more easily switch from one supplier to another. BEUC would not generally favour direct price controls but there may be a case for some limited price caps for domestic consumers in the early days of liberalisation of the energy markets.

The Slovenian Presidency starts in January for the usual six-month rotation. Can you tell us about your experiences with presidencies? How have their practices evolved over time? Do you think their work has become more or less efficient? Any anecdotes to tell?

By this stage I must have witnessed thirty-four presidencies and have missed only three or four of the visits we make to the relevant minister(s) before each presidency.

There has been no single pattern to them. Some have been embarrassing. In one case, the minister started to read his speech for another delegation until stopped by his civil servants. In another, the minister spent most of the meeting looking at one of my female colleagues. We complained to one minister that a certain directive had not been implemented in his country. He affected great surprise, picked up the telephone, spoke to an underling and said: "It is implemented now". Actually, it wasn't.

However, these were very much the exceptions. Most of the meetings were serious and became more so over the years, especially after [the introduction of the] co-decision [procedure], because there was much more managing of dossiers to be done.

Generally, smaller member states were more 'presidential', while the bigger ones often tended to see the presidency as an opportunity to push their own agendas.

The fastest response we got at one of these meetings was in late 2006 when we issued our long-standing demand for a Charter on Digital Rights to the German minister [Horst] Seehofer. He instantly replied: "That's a good idea - we'll do it". And he did.

Looking ahead, what do you think will be the next big consumer policy issues in the coming decade(s)? As a member of the Transatlantic Consumer Dialogue (TACD), do you see a convergence between EU and US regulation on consumer rights or a departure? Who is most likely to take the lead, and on which issues?

Despite disagreements on specific issues, the social, political and economic ties between the EU and US are immensely strong. There will always be, and should always be, an effort to improve cooperation and reduce transatlantic barriers.

These efforts will wax and wane depending on many factors, including changing US administrations and European Commissions. Ideally, there should be a process of learning from one another and joining forces to deal with common problems, such as obesity.

But I think there are limits to the extent to which we will see actual convergence. There will certainly be some, but there are huge differences in the political climate, culture and history between the US and the EU.

As for who will take the lead, the transatlantic agenda is set largely by economic interests on either side of the Atlantic. Whoever is facing a problem of access to the other's market will tend to press for political action to resolve that problem and that pressure will then feed into the transatlantic agenda.

As to new issues, it seems that the price of food is likely to increase for some time, for a variety of reasons.

Services have become more important as a consumer issue because we are all spending more and more of our money on services and less on goods.

Climate change is an obvious challenge that will affect the capacity of all consumers to consume.

There will be huge changes in intellectual property rights, partly because the single market has still to take effect here.

Changing demographics will affect income, pensions and health care. If present trends continue, the economic and social cost of obesity will be immense, not to mention the human and individual costs. Two years ago, the US Surgeon General said that obesity was becoming a greater threat to America than terrorism.